Shipments of barges carrying gasoil from the key Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub to destinations along the Rhine River have increased markedly in the last two weeks. A seasonal interest in moving heating oil from ARA into Germany, eastern France, and Switzerland is expected, and should increase during the onset of the European winter. But, other factors have also contributed to the recent increases.
When water levels along the Rhine fall, barge operators are only able to load cargoes that are well below their vessels’ usual carrying capacity, due to restrictions on draft - the distance measured from the bottom of a vessel to its waterline. In addition, water levels, as semi-continuously published by the official “pegel” data for various points along the key European waterway, steadily decreased during September and October this year due to a lack of rainfall. Levels hit a low around mid-October, leaving barge operators able to load only to around 50 percent to 75 percent of their usual full cargo size. This also prompted a spike in Euros/MT freight costs, as shippers sought to compensate for being able to move only smaller volumes per each shipment they performed.
These seasonal water level declines are far from unusual: Rhine barge market sources say 2015 saw the worst sustained period of low water levels for 40 years, which continued between July and November 2016 and left barges able to load only 30 percent of capacity. This led to a severe lack of spot tonnage and a resulting spike in chartering costs.
Genscape’s weekly Rhine Oil Barge report allocates each barge seen entering the Rhine a product grade based on an algorithm, which is determined by the usual type of petroleum product (gasoil, gasoline, naphtha/jet, etc.) shipped to each destination terminal. This information is also combined with Genscape’s proprietary knowledge of the product breakdown at each major ARA load terminal, as used to measure inventories for Genscape’s weekly ARA stock reports.
Combining this methodology with Genscape Vesseltracker’s AIS data, total weekly flow volumes of GO/ULSD barges from ARA to the Rhine were steady at just over the 100 KMT per week mark between mid-September and mid-October 2016. Prior to that, weekly loadings at times exceeded 200 KMT earlier in 2016.
However, barge flows of GO/ULSD rose to around 157 KMT during the week ending November 18, 2016, before increasing to total 188 KMT in the week ending November 25, 2016. The increase coincided as water levels at the German town of Kaub – often referenced as a general measuring point for the river – more than doubled between mid-October and mid-November 2016. Barge brokers said that freight costs also more than halved between mid-October and mid-November 2016.
The recent increase in flow volumes measured may prove short-lived. However, one report suggested little recent and expected rainfall along the river may cause water levels to drop again.
Receive accurate and timely fundamental data to gain insight into the most critical component of the European oil supply with Genscape’s ARA Refined Product and Crude Storage Reports. These reports measure tank-by-tank physical inventories for gasoline and naphtha, jet fuel, crude oil, and gasoil. To learn more, or request a free trail of Genscape’s ARA Refined Product and Crude Storage Reports, please click here.
Genscape's weekly Rhine Oil Barge Report combines industry expertise, AIS data, and proprietary storage data to provide a complete picture of German refined product imports. This includes details of refined product flows from the ARA up the Rhine, broken down by type, load terminals, and delivery area. To learn more, or to request a free trial of Genscape's weekly Rhine Oil Barge Report, please click here.
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